Examining the effects of construal on financial decision-making using fNIRS

Background: Construal level – described simply as thinking about how (low construal) or why (high construal) something needs to be done – has been shown to affect decision-making making. In the context of financial decisions, it has primarily been examined in the context of delayed gratification or long-term plans. However, there is evidence that construal interacts with cognitive load and can have a more influence on risk-related decisions. In addition, there is a death of work examining neurological correlates of construal in this context.
Objectives: to examine how low and high construal affect risk-taking in financial decisions and identify neurological indicators of construal.
Design: 2 experimental studies were conducted. In both, tasks were presented to increase cognitive load. Then, construal-related cues were presented prior to each trial in coin-toss gambling task. In experiment 2, fNIRs was used to measure frontal lobe activation during decision-making.
Results: Using mixed-effects logistic regression, Experiment 1 showed that high-construal predicted significantly lower probability of gambling. Experiment 2 data are being analysed at the time of submission.
Conclusion: The results of Experiment 1 show the impact of construal on immediate risk-related financial decisions. Experiment 2 will provide more information on how construal impacts the decision-making process.